Re-imagining the Magi
With the crowning of the Strictly winner and passing of the shortest day, it often falls to a CIO to write a seasonal article or look at the year ahead.
By Julian Chillingworth, Chief Investment Officer, Rathbones
We have already published our 2017 investment outlook, so I have instead chosen a festive theme.
In recent weeks, school children across the country have earnestly performed end-of-term nativities, playing Mary and Joseph, angels, twinkling stars, various farm animals, shepherds and, of course, wise men. This made me wonder who might take the roles of the Three Wise Men (also known as the Three Kings or the Magi) if the nativity were to happen in 2016 – leaving aside the obvious point that it wouldn’t be ‘2016’ if Jesus was about to be born.
Little is known about the Three Wise Men. Of the four New Testament gospels, only Matthew mentions them and details are scant. They came “from the east”, bearing gifts of gold, frankincense and myrrh, leading some to assume that they were three in number. Western Christian tradition knows them as Melchior, Caspar and Balthazar. Eastern Christian references, however, often describe 12 men.
Furthermore, the traditional narrative that they visited Jesus in a stable on the night of his birth, surrounded by shepherds and a host of angels, is purely artistic convention – helpful if you need to find parts for a large class of children! Matthew relates that a group of wise men went to see Jesus in a house, but only his mother Mary is mentioned as being there.
The date of their visit is equally disputed. Eastern Orthodoxy celebrates it on 25 December: ironically, given ‘single night’ nativity plays, Western Christian churches celebrate Three Kings’ Day at Epiphany (6 January).
To keep things simple, however, I will assume that there are three wise men. The date of their visit is unimportant, but they must be real people and alive today. The latter point sadly rules out Professor Albus Dumbledore, who all children know to be extremely wise – if only the headmaster of Hogwarts were eligible.
In the post-global financial crisis era, central bankers are often credited with magical powers. When Mark Carney was appointed as the new Governor of the Bank of England in late 2012 his radical approach was seen as a way to bring the country out of its post-crisis economic morass. He has been very effective: the UK is one of the fastest-growing developed economies in the world and has even shrugged off the uncertainty of the EU referendum result, at least for now.
Yet it seems rather parochial to pick the UK’s central banker. Surely Janet Yellen’s credentials are just as strong? After all, the chair of the US Federal Reserve is responsible for an economy of 325 million people. However, my choice is Raghuram Rajan, who stepped down in September as Governor of the Bank of India. As a professor of finance and former chief economist at the IMF, he brought an outsider’s perspective to India’s central bank. His reforms helped this country of nearly 1.3 billion people after corruption and excess had derailed its economy.
As an investment manager, I have to consider business people. Business gurus are often lauded as their company’s share price rises vertiginously, only to be undermined in the years after they leave as having failed to manage the future growth of the company. Steve Jobs had his flaws, but it would be difficult to argue that he didn’t bring a touch of genius to Apple. He isn’t eligible, however, having passed away in 2011.
Instead, I see no candidate to rival the business and investment wisdom of Warren Buffett. The ‘Sage of Omaha’ turned Berkshire Hathaway, a textiles company, into a conglomerate with diverse interests, including its world-class property and casualty insurance business. He believes capital should be reinvested rather than distributed as dividends – average annual growth in book value over the past 49 years has been 19.7%, compared with 9.8% for the S&P 500, including dividends.
Turning to world leaders, Barack Obama might nominate himself as a wise man, but as he prepares to leave office, it is difficult to feel inspired by his two terms. If the election to choose his successor was anything to go by, America is more divided and politically dysfunctional than ever.
Some might pick Aung San Suu Kyi, the First State Counsellor, Minister of Foreign Affairs and the Minister of the President's Office for Myanmar. However, she seems to be finding that life in President Htin Kyaw's Cabinet is tougher than being a heroic opposition leader.
Angela Merkel has a good case. She dominates German politics and has used her influence as head of the European Union’s most powerful member country wisely. Until her recent comments about restricting the right to wear the burqa, she has been a beacon of tolerance in an increasingly populist polity.
Instead, my world leader is Her Majesty the Queen. This may seem overly Royalist, but is instead a celebration of the wisdom and dedication of our longest-serving monarch. Although she isn’t burdened with a political role, the Queen has worked tirelessly in the interests of her country for nearly 65 years. She has arguably restored the monarchy after the damage wrought by the various indiscretions of her children and their spouses in the 1980s and 90s.
So, my Three Wise People for the 2016 nativity are Raghuram Rajan, Warren Buffett and the Queen. I’m sure you will disagree with one or all of my selections, but I hope it gets you thinking.
Seasons greetings – I wish you and your loved ones a happy and healthy new year.